[Federal Register Volume 62, Number 229 (Friday, November 28, 1997)]
[Proposed Rules]
[Pages 63282-63284]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-31166]


 ========================================================================
 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
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 

  Federal Register / Vol. 62, No. 229 / Friday, November 28, 1997 / 
Proposed Rules  

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OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 890

RIN 3206-AH61


Federal Employees Health Benefits Program: Disenrollment

AGENCY: Office of Personnel Management.

ACTION: Proposed rule.

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SUMMARY: The Office of Personnel Management (OPM) is proposing 
regulations that are consistent with existing administrative procedures 
requiring employing offices to provide information about enrollees in 
the Federal Employees Health Benefits (FEHB) Program to the carriers of 
the FEHB plans in which they are enrolled. Carriers are also required 
to use the information provided by employing offices to reconcile their 
enrollment records. The proposed regulations would also regularize the 
conditions that would allow carriers to disenroll individuals when 
their employing office of record does not show them as enrolled in the 
carrier's plan and the carrier is otherwise unable to verify the 
enrollment. The purpose of these proposed regulations is to facilitate 
reconciliation of carrier and employing office enrollment records, 
especially in cases where the carrier has not previously received a 
notice showing an enrollment no longer is valid.

DATES: Comments must be received on or before December 29, 1997.

ADDRESSES: Send written comments to Frank D. Titus, Assistant Director 
for Insurance Programs, Retirement and Insurance Service, Office of 
Personnel Management, P.O. Box 57, Washington, DC 20044; or deliver to 
OPM, Room 3425, 1900 E Street NW., Washington, DC; or FAX to (202) 606-
0633.

FOR FURTHER INFORMATION CONTACT: Margaret Sears (202) 606-0004.

SUPPLEMENTARY INFORMATION: The proposed regulations are consistent with 
existing procedures that require employing offices to report to each 
carrier on a quarterly basis the names and certain other data about 
employees and other individuals serviced through its payroll office(s) 
who are enrolled in the carrier's plan. OPM would specify the format 
and the information to be contained in the report, such as the 
individual's Social Security Number and the amount of withholdings and 
contributions for that individual. Carriers would use the information 
to reconcile their enrollment records.
    Currently, when the carrier receives a quarterly report, it is 
required by contract to compare the enrollees listed with its own 
record of enrollees for that payroll office. If the carrier records 
show an enrollee that is not listed by the payroll office, the carrier 
contacts the payroll office for an explanation. The payroll office 
provides documentation to resolve the discrepancy or gives the reason 
the employee is no longer in the plan or no longer on the payroll (for 
example, the employee canceled the enrollment, separated from Federal 
service, retired, changed plans, or transferred to a different agency) 
and the effective date of the change.
    The proposed regulations would adopt as regulatory requirements the 
current administrative quarterly reporting requirement and the 
requirement for carriers to use the information to reconcile their 
enrollment records. If the payroll office of record with the carrier is 
unable to provide information about the enrollment, the proposed 
regulations would give the carrier the authority to disenroll the 
individual, after giving him or her the opportunity to respond. 
Carriers do not currently have the authority to disenroll individuals.
    The proposed regulations also provide an administrative procedure 
for notifying the enrollee of the disenrollment. Under these procedures 
the carrier would be required to notify the enrollee that the employing 
agency of record did not show him or her as enrolled. The enrollee 
would have 31 days after the date of the notice to provide 
documentation showing that he or she was enrolled in the plan. If the 
enrollee did not provide such documentation within the required time 
frame, the carrier would disenroll him or her without further notice.
    Under the proposed regulations the employee or annuitant could ask 
his or her employing office or retirement system to reconsider the 
carrier's decision to disenroll the enrollee. The employing office 
would be required to notify both the enrollee and the carrier of its 
determination, fully explaining its findings and conclusions.
    We expect that few individuals would reach the end of this process 
without their actual enrollment status becoming clear. However, in the 
event that an individual was disenrolled under the proposed regulations 
and it is later discovered that another provision of the regulations 
should have been applied to the individual's circumstances, the 
disenrollment under this regulation would become void and the 
enrollment would be reinstated retroactively to the date of the 
disenrollment. For example, if it later became clear that the 
individual's enrollment should have continued because he or she retired 
under circumstances allowing continued enrollment, the disenrollment 
would become void.
    The proposed regulations would allow a carrier to end a self only 
enrollment upon receipt of reliable information that the enrollee had 
died. A carrier may learn of the death of an enrollee when it processes 
the claim for hospital or physician costs incurred at the time of 
death. It may also learn of an enrollee's death when correspondence is 
returned by the Postal Service with the notation that the addressee is 
deceased. These would be considered reliable sources. Since proof of 
death is not required, the carrier would send notification of its 
action to the enrollee so that the enrollee, if still living, could so 
inform the carrier. The discovery that the report of death was in error 
would void the disenrollment.
    The proposed regulations would allow a carrier to disenroll a child 
survivor annuitant when the child becomes age 22, unless the carrier 
has information indicating that the child is eligible for continued 
coverage because the child is incapable of self support due to a 
physical or mental disability. The proposed regulations include an 
administrative procedure under which the child can ask the retirement 
system to reconsider the carrier's decision to disenroll the child. The 
carrier is also required to provide the child with notice of his or her 
conversion right and possible eligibility for temporary continuation of 
coverage.

[[Page 63283]]

    Finally, the proposed regulations allow the carrier to disenroll a 
former employee who notifies the carrier that he or she has separated 
from Federal employment under circumstances that do not entitle him or 
her to an immediate annuity. The carrier would be required to send the 
individual a written notice prescribed or approved by OPM.

Regulatory Flexibility Act

    I certify that these regulations will not have a significant 
economic impact on a substantial number of small entities because they 
primarily affect administrative procedures for Federal agencies and 
health benefit carriers that participate in the FEHB Program.

Executive Order 12866, Regulatory Review

    This rule has been reviewed by the Office of Management and Budget 
in accordance with Executive Order 12866.

List of Subjects in 5 CFR Part 890

    Administrative practice and procedure, Government employees, Health 
facilities, Health insurance, Health professions, Hostages, Iraq, 
Kuwait, Lebanon, Reporting and recordkeeping requirements, Retirement.

Office of Personnel Management.
Janice R. Lachance,
Acting Director.

    Accordingly, OPM proposes to amend 5 CFR part 890 as follows:

PART 890--FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM

    1. The authority citation for part 890 continues to read as 
follows:

    Authority: 5 U.S.C. 8913; Sec. 890.102(f) also issued under sec. 
153 of Pub. L. 104-134; Sec. 890.803 also issued under 50 U.S.C. 
403p, 22 U.S.C. 4069c and 4069c-1; subpart L also issued under sec. 
599C of Pub. L. 101-513, 104 Stat. 2064, as amended.

    2. In subpart A, Sec. 890.110 is added to read as follows:


Sec. 890.110  Enrollment reconciliation.

    (a) Each employing office must report to each carrier on a 
quarterly basis the names of the individuals who are enrolled in the 
carrier's plan in a format and containing such information as required 
by OPM.
    (b) The carrier must compare the data provided with its own 
enrollment records. When the carrier finds in its aggregate enrollment 
records individuals whose names do not appear in the report from the 
employing office of record, the carrier must request the employing 
office to provide the documentation necessary to resolve the 
discrepancy.
    3. In subpart C, Sec. 890.308 is added to read as follows:


Sec. 890.308  Disenrollment.

    (a)(1) Except as otherwise provided in this section, a carrier that 
cannot reconcile its record of an individual's enrollment with agency 
enrollment records must provide written notice to the individual that 
the employing office of record does not show him or her as enrolled in 
the carrier's plan and that he or she will be disenrolled 31 days after 
the date of the notice unless the enrollee provides appropriate 
documentation to resolve the discrepancy. Appropriate documentation 
includes, but is not limited to, a copy of the Standard Form 2809 
(basic enrollment document), the Standard Form 2810 transferring the 
enrollment into the gaining employing office (or the equivalent 
electronic submission), copies of earnings and leave statements or 
annuity statements showing withholdings for the health benefits plan, 
or a document or other credible information from the enrollee's 
employing office stating that the employee is entitled to continued 
enrollment in the plan and that the premiums are being paid.
    (2) If the carrier does not receive documentation required under 
paragraph (a)(1) of this section within the specified time frame, the 
carrier must disenroll the individual, without further notice.
    (3) The enrollee may request his or her employing office to 
reconsider the carrier's decision to disenroll the individual. The 
request for reconsideration must be made in writing and must include 
the enrollee's name, address, Social Security Number or other personal 
identification number, name of carrier, reason(s) for the request, and, 
if applicable, retirement claim number.
    (4) A request for reconsideration of the carrier's decision must be 
filed within 60 calendar days after the date of the carrier's 
disenrollment notice. The time limit on filing may be extended when the 
individual shows that he or she was not notified of the time limit and 
was not otherwise aware of it, or that he or she was prevented by 
circumstances beyond his or her control from making the request within 
the time limit.
    (5) After reconsideration, the employing office must issue a 
written notice of its final decision to the individual and the carrier. 
The notice must fully set forth the findings and conclusions on which 
the decision was based.
    (6) If, at any time after the disenrollment has occurred, the 
employing office or OPM determines that another provision of this part 
applies to the individual's enrollment or the carrier discovers or 
receives appropriate documentation showing that another section of this 
part applies to the individual's enrollment, the disenrollment under 
paragraph (a)(2) of this section is void and coverage is reinstated 
retroactively.
    (b) When a carrier receives, from any reliable source, information 
of the death of an enrollee with a self only enrollment, the carrier 
may take action to disenroll the individual on the date set forth in 
Sec. 890.304(a)(1)(iv) or Sec. 890.304(b)(4) of this part, as 
appropriate. The carrier must attempt to notify the affected individual 
or a family member of the disenrollment. If, at any time after the 
disenrollment has occurred, the employing office or OPM determines that 
another provision of this part applies to the individual's enrollment 
or the carrier discovers or receives appropriate documentation showing 
that another section of this part applies to the individual's 
enrollment, the disenrollment under this paragraph (b) is void and 
coverage is reinstated retroactively.
    (c)(1) When a child survivor annuitant covered under a self only 
enrollment reaches age 22, the carrier may take action to disenroll the 
individual effective with the date set forth in Sec. 890.304(c)(1) 
unless records with the carrier indicate that the child is incapable of 
self support due to a physical or mental disability. The carrier must 
provide the enrollee with a written notice of disenrollment prescribed 
or approved by OPM.
    (2) The child survivor enrollee may request the retirement system 
to reconsider the carrier's decision to disenroll the individual. The 
request for reconsideration must be made in writing and include the 
enrollee's name, address, Social Security Number or other identifier, 
name of carrier, reason(s) for the request, and the survivor annuity 
claim number.
    (3) A request for reconsideration of the carrier's decision must be 
filed with the retirement system within 30 calendar days from the date 
of the carrier's disenrollment notice. The time limit on filing may be 
extended when the individual shows that he or she was not notified of 
the time limit and was not otherwise aware of it, or that he or she was 
prevented by circumstances beyond his or her control from making the 
request within the time limit.
    (4) After reconsideration, the retirement system must issue a 
written

[[Page 63284]]

notice of its final decision to the individual and provide a copy to 
the carrier. The notice must fully set forth the findings and 
conclusions on which the decision was based.
    (5) If, at any time after the disenrollment has occurred, the 
employing office or OPM determines that another provision of this part 
applies to the individual's enrollment or the carrier discovers or 
receives appropriate documentation showing that another section of this 
part applies to the individual's enrollment, the disenrollment under 
paragraph (c)(1) of this section is void and coverage is reinstated 
retroactively.
    (d) When an enrollee notifies the carrier that he or she has 
separated from Federal employment and is no longer eligible for 
enrollment, the carrier must disenroll the individual, subject to the 
31-day temporary extension of coverage and conversion right under 
Sec. 890.401, on the last day of the pay period in which the separation 
occurred, if known, otherwise the carrier must disenroll the employee 
on the date the employee provides as the date of separation. The 
carrier must notify the enrollee of his or her right to convert to a 
nongroup contract with the carrier and possible eligibility to enroll 
under the temporary continuation of coverage provisions as set forth in 
subpart K of this part based on the termination of enrollment as 
provided under Sec. 890.304(a)(1)(i).

[FR Doc. 97-31166 Filed 11-26-97; 8:45 am]
BILLING CODE 6325-01-P